Subspace Labs Raises $32.9 Million to Bring Internet Scale to Web3

Subspace Labs is developing a scalable base layer for Web3, enabling blockchains and metaverses to run at Internet scale

Subspace Labs, developer of Subspace Network, today announced the completion of a US$32.9 million strategic financing round led by Pantera Capital with participation from Coinbase Ventures, Crypto.com, Alameda Research, ConsenSys Mesh, KR1, Hypersphere Ventures, Stratos Technologies, Alumni Ventures Blockchain Fund, GSR Ventures, Eniac Ventures, Bixin Ventures, Definancex, Candaq, Vendetta Capital, Illusionist Group, NGC Ventures, Cabin VC, Gate Ventures, OneBlock Capital, and Automata Network.

Subspace is a new eco-friendly, scalable layer-one blockchain that is able to serve as an infrastructure layer for the entire Web3 ecosystem. From NFT based gaming and metaverses to cross-chain applications, Subspace brings smart storage at Internet scale.

“With the support of our investors, Subspace is re-envisioning the types of apps that can be stored on and secured by a blockchain. We are excited to empower builders with the tools and services they need to unlock the next wave of innovation in Web3.” — Jeremiah Wagstaff, co-founder and CEO at Subspace Labs

The Subspace Network provides a decentralized and trust-minimized alternative to traditional cloud providers, such as Amazon Web Services (AWS). It is built around a new eco-friendly, massively scalable layer one blockchain that is carefully designed to serve as a decentralized infrastructure layer for the entire Web3 ecosystem. Subspace will allow existing blockchains, layer two protocols, and dapps to scale without compromise.

“Pantera is thrilled to join Subspace as an investor to support its mission to build the foundational infrastructure for Web3. The R&D behind the Subspace Network’s scalability architecture will resolve critical issues holding back the growth of the blockchain industry as a whole.” — Joey Krug, Co-Chief Investment Officer at Pantera Capital

As adoption increases, the digital footprints of crypto networks are experiencing massive growth, leading to a phenomenon known as blockchain bloat. The backbone of any blockchain network is the community of node operators. As operating a node becomes too expensive, fewer individuals can dedicate their resources, resulting in more centralization and new security challenges. In an effort to constrain bloat, many networks have chosen to limit scalability by artificially capping the block size. These limits dramatically raise the cost of transacting on-chain while pushing more activity to less secure and more centralized off-chain solutions. In the case of Ethereum, the burden of running a full node has nearly doubled in the last year to a staggering 9TiB of storage.

Source: https://etherscan.io/chartsync/chainarchive

Consider how this impacts the most recent killer app of crypto, NFTs. Unlike fungible crypto assets, such as Bitcoin, Ether, or ERC-20 tokens, which are fully on-chain and self-sovereign, NFT metadata (such as the underlying image or video files) is typically stored off-chain due to the limited block size and resulting high cost-of-storage. The long-term availability of NFT data depends upon the goodwill of the project creators, who typically host these assets on servers they maintain or through centralized marketplaces like OpenSea, while sometimes temporarily publishing the data to decentralized networks like IPFS.

Source: https://twitter.com/DennisonBertram/status/1368555185946124294

Existing blockchains have become victims of their own success, resulting in high transaction fees that limit crypto adoption to the wealthiest 1%. For Web3 to realize its full potential and support killer apps like DeFi, GameFi, and the Metaverse, which require millions of transactions per second and storage for billions upon billions of NFTs, the fundamental scalability bottleneck must be resolved. This is the root problem that Subspace Labs is solving by building a scalable base layer that all blockchains can leverage to support the industry-wide goal of crypto mass adoption.

At the core of the Subspace Network lies a novel combination of consensus, storage, and compute (as described in their technical paper), which yields the first design that can fundamentally resolve the blockchain bloat problem. This Nakamoto-style, longest-chain protocol is then extended with a host of cutting-edge vertical and horizontal scalability proposals originating from the Tse Lab at Stanford University. Together, these two lines of work produce a whole that is much greater than the sum of its parts, yielding an entirely new blockchain paradigm that is simultaneously secure, scalable, decentralized, eco-friendly, and permissionless.

This unique design allows the Subspace Network to support thousands of shards, millions of transactions per second and store exabytes of data on-chain. The sheer volume of data that the Subspace Network can ingest allows it to serve as a single source of truth for the entire crypto ecosystem. Metadata for billions of NFTs can also be stored on Subspace, regardless of which chain they were minted on. Entire blockchain networks (currently Polkadot and Kusama, soon Ethereum) can also be archived on Subspace. When also validated by native smart contracts, these archives can be used as the basis for simple and secure bridges, allowing for interoperability between all integrated networks.

With this round of financing, Subspace Labs plans to triple the size of its protocol engineering team, expand its integrations team to more deeply connect with projects in the Dotsama and Ethereum ecosystems, and build a product team to focus on Subspace Meta Services (SMS), the infrastructure portal into the Subspace Network. SMS will include a suite of standard tools and interfaces that expose the underlying Subspace blockchain to Web3 builders in a way that is agnostic to other networks. These will include a unified chain history API (MetaBlock), a chain agnostic NFT storage service (MetaVault), and a cross-chain asset exchange protocol (MetaSwap), among many others.

Subspace Labs was founded in early 2018 by Jeremiah Wagstaff and Nazar Mokrynskyi, an unlikely duo of self-taught protocol hackers who met on Github. After several years of R&D, largely funded through a grant from the US National Science Foundation, the team raised a US$4.5 million seed round in June 2021 led by Hypersphere Ventures and Stratos Technologies. The Subspace Network is under active development and is built with the Parity Substrate framework, the same tool used to build the Polkadot blockchain. An early version was funded through a Web3 Foundation Grant.

About Subspace Network

Subspace Network lets developers run Web3 apps at Internet scale. It provides a simple interface for quickly deploying multi-chain decentralized apps that auto-scale with demand. Subspace is powered by a new eco-friendly, 4th generation blockchain that enables massively scalable on-chain storage and compute, without compromising security or decentralization. It seamlessly integrates with existing blockchains, layer two protocols, and decentralized applications, allowing it to serve as a foundational infrastructure layer for the entire Web3 ecosystem. Subspace will empower builders to unlock the next wave of crypto adoption by supporting NFTs, GameFi, and the Metaverse at Internet scale.

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About Pantera Capital

Pantera Capital is the first institutional investment firm focused exclusively on bitcoin, other digital currencies, and companies in the blockchain tech ecosystem. Pantera launched the first cryptocurrency fund in the United States when bitcoin was at $65/BTC in 2013. The firm subsequently launched the first exclusively-blockchain venture fund. In 2017, Pantera was the first firm to offer an early-stage token fund. Pantera Bitcoin Fund has returned over 65,500% in eight years and has returned billions to its investors. Pantera manages $5.5bn across three strategies — passive, hedge, and venture — exclusively focused on bitcoin, other digital currencies, and companies in the blockchain tech ecosystem.

For more information, please visit http://www.panteracapital.com

Media Contact

Yeweon Park
Email: yeweon@subspace.network
Telegram: @yeweoni